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Big Volume in Puts Continues Through 9000 Excitement

The cynics have been around this week, shopping for puts as the market made an uneven move toward

Dow 9000

. And they're not going away.

"There's been nothing but put buying all this week," said Tom Burnett, senior trading adviser at

Wall St. Access

, a New York discounter. "It's that wall of worry in the index options." Burnett keeps his eye on the

S&P 100


S&P 500

(SPX) and the

Dow Jones Industrial

(DJX) options to track the degree of concern in the market. Thursday's numbers show puts outpacing calls in each of the three indices by significant amounts. In the OEX, 77,183 puts traded compared with 56,399 calls and in the SPX, puts traded 52,000 contracts against 27,000 calls. Ninety minutes into today's session, the

Chicago Board Options Exchange

-- where the OEX, SPX and DJX call home -- showed that 37,900 index puts had traded compared with 30,915 calls, with the calls increasing in value more frequently than the puts.

Mike Schwartz, head options strategist at

CIBC Oppenheimer

, said he expected put plays to be

en vogue

today as well. "We'll probably see increased activity in index puts," he said. "There are people who see 9000 as a selling point."

What's keeping the mix even more interesting is this morning's surprisingly weak employment numbers, which have taken a significant degree of volatility out of options prices. The OEX action today was shaking out almost even, especially in the April 535 contracts, with the index up 2.02 to 539.88. In the April 535 options, 2,700 calls had traded early against 2,300 puts. The price of the puts, however, was falling and down 7/8 ($87.50) to 5 5/8 ($562.50) while the calls rose 1 1/4 ($125) to 11 1/4 ($1,125) in early trading. The barely out-of-the-money April 540 calls posted early volume of more than 4,000 contracts while traffic in the out-of-the-money April 530 puts topped 2,200 contracts.

"People seem more interested in hedging during the past two weeks, and that's good," said Kevin Murphy, echoing Burnett and adding that the worry over the market actually helps it push through new barriers. "It's a combination of 9,000 and some anxiety about a 5 3/4 long bond," he said.

Paul Foster, the options strategist at

, said he wasn't one of today's put hunters today and had little inclination to get in the way of the DJIA. "I don't want to fade it today," he said. "Maybe Monday, but definitely not today."